The Inside Scoop on the Inside Day

An inside day is simply where the range for the day is “inside” the range of the previous day. In
other words, it is a day that has a lower high than the previous day AND a higher low than the
previous day.

For many years there has been some very good information on how to trade an inside day. My first
exposure to this inside day came from Larry Williams many years ago. I am not sure where Larry
first got the idea to look at this particular pattern, but no doubt it has been around for a very long
time. However, I have never seen a complete picture of how an inside day should be traded. That
is why I have taken it upon myself to create the complete picture with this report.

I am going to do things a little differently than most reports like this I have done. In the past, I have
created the report by detailing the process and then giving the conclusion at the end. This time, I
am going to give my conclusion at the end and the provide the process and evidence I used to based
my conclusion. It is my belief that if you see the end first, you will understand the process better
second.

Before I get started, you need to understand a few things about how I look at the market and
specifically, short-term trading the S&P.

PURE MARKET MOVE

This is a Pure Market Move Report. When I research short-term patterns in the S&P, I start by
looking at the market movement from the open to the close. I do not create special entry or exit
rules, I am looking for the “pure market movement” that occurs immediately after the pattern being
investigated. By doing so, I am not looking at any statistics that were potentially created by data
fitting, I am looking at EVERY occurrence in its purest form. Every stat in this report is based on
buying on the open and exiting on the close, no stops or targets. Accordingly, selling opportunities
actually show up in the form of losses in the statistics. This will become more clear as you get into
the report itself.

BIG S&P VERSUS S&P E-MINI

Testing is done in the BIG S&P, not the S&P E-mini. There are several reasons for this. The first
is because the S&P E-mini does not have a set open and close period like the big S&P, which is
9:30 to 4:15 Eastern. The second is because the S&P E-mini does not go back to the beginning of
our testing period, which is 1991. Having said that, please understand that in actual trading, it is my
recommendation that traders use the S&P E-mini, even if you do have a larger account. The
volume in the S&P E-mini has far surpassed the volume in the pit traded contract. As a result,
slippage in the S&P E-mini is virtually non-existent compared to the massive slippage that is almost
continually realized in the big S&P.

TESTING PERIOD

The testing period only goes back to 1991. The main reason for that is because part of the
information I am looking at is the average size of the move in the market immediately after the
occurrence of the inside day. Today’s average range in the S&P is far larger than it was in 1991. If
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I include too many years prior to 1991, the data will be severely skewed and inaccurate as far as the
average size move is concerned. This is not only a problem with accurately assessing what the
reasonable profit potential is in any given situation, but also what the reasonable risk is as well.
Since 1991, there are over 450 inside days in the S&P, and provides more than large enough base of
occurrences.

SEASONAL FACTORS

In order for you to completely understand the process and reasoning behind some of these
strategies, you MUST understand that short-term seasonals play a major role influencing the next
day’s market action. For evidence of how important short-term seasonal factors are, you can
purchase my Report entitled S&P Day of Week Report by going to the following link. In this
report, you will see many trading opportunities exist from seasonal influences regardless of market
action at the time.

Link to purchase S&P Day of Week Report

For example, the most bearish week of the year is the third week of July. In 2004, if you would
have sold on the open and exited on the close each of the 5 trading days during the third week, you
would have won 4 out of 5 for a total net profit of $8,775! This is a strong selling opportunity, even
in bull markets. In the 90’s, selling during this week still provided a net profit almost every year.

There are times when patterns are solid regardless of the seasonals. But more times than not, you
will find that patterns can be strongly enhanced by combining seasonal factors, such as day of week,
week of month and month of year. These will become very obvious as you look through the
performance reports provided in this report. Seasonal factors are definitely taken into account when
determining how to trade inside days in the S&P.

There are a few seasonal consistencies that have shown to be very consistent when combined with
an inside day. For example, if the next trading day after an inside day occurs falls within the second
week of the month, almost all other circumstances do not make a huge difference (although there
are some). As a general rule, this is a very bearish combination. This is also a strong combination
in many other patterns that provide selling opportunities as well, so it is no surprise that this is the
case.

Likewise, the most bullish months of the year for many bullish patterns are March and October.
Again, there are exceptions, but the inside day is generally not one of them. Bullish patterns can be
very bullish when combined with the months of March and October. Even some bearish patterns
become bullish during these two months. Again, because of the consistency, it should definitely be
taken into consideration.

Finally, there are some combination of seasonals and the inside day that do not seem to make much
sense on the surface. However, just because it does not seem to make sense on the surface does not
mean that it is not valid. Certainly, a little extra caution should be used, but many times there is a
perfectly good explanation, and sometimes there is not. For example, there are certain Wednesdays
that seem to very well while all the other days of the week do not with a certain pattern. Research
has shown that Wednesdays can often be a contrarian day with certain types of market action. This
is in line with some of the performance reports provided in this report. Others are not so easily
discernable, and, in fact, may simply be a statistical anomaly. It is impossible to know which ones
fall under which category. Accordingly, the proper way to approach these scenarios is to not pick
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and choose. Time will tell whether some are anomalies or actual valid seasonal influences. Some
will be and some will not be. Overall, even the ones that are not valid should provide a 50/50
scenario which should not completely counter those that are valid. In short, the statistical
probabilities are still in your favor barring any fundamental and/or dramatic change in market
behavior.

INTERPRETING DAYS AND WEEKS

Throughout this report, we divide many of the seasonals by day and week. For example, the most
bearish week with regard to an inside day (and many other patterns) is the 2nd week of each month.
This means any trading day that falls on the 8th – 14th. This does not mean that the inside day has to
occur on during the second week, only the first trading day after the inside day. For example, if the
inside day occurs on a Friday the 5th, the inside day actually occurred in week one, but the day that
you will place the trade is in week two. If the seasonal filter says do not take trades during week
two, it means do not take trades if the first trading day after the inside day occurs in week two.

Likewise with days of the week. If a seasonal filter says do not take trades on Monday, it does
NOT mean that you don’t take trades when the inside day occurred on a Monday, it means that you
don’t take the trade if the following day after the inside day is a Monday. This is vitally important
for you to understand.

________________________________________________________________________________

To begin with, I am going to give two strategies that provide the basis of the big picture with the inside day.
I will then use these strategies to branch out into other variations of the inside day that should be considered.

INSIDE DAY STRATEGIES THAT PROVIDE THE MOST FREQUENT OPPORTUNTIES:

BUY STRATEGY # 1

If Inside Day and Close > Close.1

Seasonal Filters:

Week 1 – Do not take trades on Thursdays

Week 2 – Do not take any trades.
Week 3 – Do not take any trades.
Week 4 – Do not take trades on Mondays or Tuesdays
Week 5 – Do not take trades on Fridays

Net Profit: $75,400

# Trades: 60
% Profitable: 73%
Average Trade: $1,257
Win/Loss Ratio: 1.90
Profit Factor: 4.80

Strategy Notes

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When there is an inside day and the close is less than the previous close, week one is the most
consistent week providing the most opportunities and the highest probability. The first Friday of
the month has shown the largest moves to the upside following this pattern.

Week two is bearish with most inside day strategies as you will see later on in this report. There are
some bullish scenarios, such as in March, but there is not enough consistency to include them in this
particular scenario.

Week three is bullish with an average trade of over $800 (as long as you don’t buy on the third
Friday), but the probability number is only at 53%. Therefore, it is not quite as strong as some of
the other scenarios and caution should be taken.

Week four is strongly bullish once you get past Monday and Tuesday (typically weak days overall
regardless of pattern). There are fewer opportunities, but when they occur, very strong. Week five
is also very bullish as long as you are not buying on the last Friday of the month, which can be
typically bearish.

SELL STRATEGY # 1

IF INSIDE DAY AND CLOSE < OPEN OR CLOSE < CLOSE.1

Seasonal Filters:

Week 2 trades only.

Not Mondays

Net Profit: $67,900

# Trades: 52
% Profitable: 73%
Average Trade: $1,306
Win/Loss Ratio: 2.29
Profit Factor: 6.20

Strategy Notes

Here is a scenario that is showing weakness on the day of the inside day. This weakness is
evidenced by either a lower close from the opening of that day, or a lower close from the previous
close. One OR the other. Both do not have to exist.

The best application is based on the second week of the month, again, as long as the trade is not
placed on a Monday (which means that the inside day had to occur during the first week). Since
1998, strategy has reeled off 20 wins in a row!

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INSIDE DAY ANALYSIS:

Since 1991, there have been 455 inside days. As you can see from the stats below, if we buy on the
open and exit on the close each and every day immediately following an inside day, the statistics
slightly favor the downside, but are pretty much even overall. This alone should debunk the theory
out there that inside days are flat out bearish, because they are not.

This is the beginning point from which we will begin to further analyze these statistics and isolate
various consistencies that tend to be followed by the market moving in one direction or the other.
There are limitations to the profitability of our efforts. You will notice that there are a total of 215
days where the market moved higher by a total of $327,238. There were also 240 days where the
market moved lower by a total of $378,963. This means that if we were able to assign some sort of
circumstance to isolate every buying opportunity and every selling opportunity, the maximum
potential profits available is just over $706,000. Obviously, we will not be able to isolate every
buying and selling opportunity. In fact, isolating 20% of the total profit potential in any pattern is
doing very well. As you have seen from the above strategies, we have been able to exceed that by
requiring some basic market action and seasonal filters. As we begin to break the 455 occurrences
down, there will be more.

INSIDE DAY – WEEK OF MONTH BREAKDOWN

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The first breakdown we are going to look at is the weekly performance of inside days. The one
week that sticks out is the second week of the month. As stated earlier, this is when the day AFTER
the inside day falls between the 8th and the 15th of any given month. At this stage of the analysis,
this is a huge factor that will play a huge role in being able to easily uncover some very profitable
and consistent opportunities.

The first week comes in a distant second place with regard to offering some obvious opportunities.
The first week also has the fewest number of opportunities compared to the other weeks. Weeks
three and four are statistically even and we will have to look at circumstances in market action to
uncover the trading opportunities.

INSIDE DAY – DAY OF WEEK BREAKDOWN

Monday looks to be the most bearish day of the week with regard to the size of the move down as
illustrated in the Average Trade section. However, about half of that net average trade comes from
one $13,550 move as evidenced by the max loss column. There are also max wins that offset many
of these, so all in all, there is a slight bearish overtone, but nothing overwhelming from the day of
week breakdown.

INSIDE DAY – MONTH OF YEAR BREAKDOWN

There are definitely a few stand out months that should be taken into consideration when looking to
isolate trading opportunities based on the inside day. October is clearly the most bullish month
which is consistent with many other patterns as well. This is followed by March (again, consistent
with other trading patterns). May looks to have a positive net average favoring the upside, but the
probability of direction favors the downside by 56%.

On the bear side of the breakdown, January, April, July and August are all very solid in the bear
camp. That doesn’t mean that there are not buying opportunities, it just means that they will be
fewer and further between. If you have done any research in market action in general, or read my
Day of Week report, you will see that every single one of these four bearish months with regard to
the inside day are also more bearish in general.

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The process from here is to begin to combine some of these findings with additional market action
characteristics to determine where and when the best trading opportunities exist. As evidenced
earlier, some fairly simple requirements can be added to the inside day requirement to achieve our
goal.

THE MOST OBVIOUS FIRST:

The first week of the month proved to be the most bullish week. We will start there. The first thing
we need to do is break the first week down by days of week and also look at the monthly
performances.

INSIDE DAY - WEEK ONE DAY OF WEEK BREAKDOWN

The $1,515 average trade shown on Friday is a very solid number. This includes a move down of
over $10,800 in the average, but also includes an $11,000 move higher, which cancel each other
out. This means the statistics are pretty much an accurate reflection of when the buying opportunity
is during the first week. The probability is almost at 60% which I personally would like to see a
little higher, but the numbers definitely support buying regardless.

On the flip side of this is Thursday. At 70% down, this cannot be ignored. The average move down
of $486 doesn’t match Friday’s buy number, but the probability picks up the slack. Wednesday
shows a solid probability of moving down, but the average move down is severely lacking.
Tuesday looks dead even and Monday only has 13 occurrences and a negative average trade to
offset the almost 70% probability to the upside. Thursday and Friday of the first week look to be
the days to key on.

INSIDE DAY – WEEK ONE MONTHLY BREAKDOWN

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Less emphasis has to be given to the monthly breakdown here simply because there are fewer
occurrences as a general rule. However, it comes as no surprise that March and October are solid
buying opportunities for the first week, regardless of which day of the week it is. June also makes
an entrance as a bullish first week for the inside day. These are something that we will note as
opposed to creating some sort of trading opportunity around.

INSIDE DAY – WEEK TWO DAY OF WEEK BREAKDOWN

Clearly, the most solid trading opportunity from strictly a seasonal standpoint is on Tuesday during
the second week of the month. At 65% to the downside with an average move down of over $1,000
without any additional requirements, this is tradable as is. It will get even better once we begin to
add an additional requirement as far as market action is concerned. Wednesday thru Friday also
offer decent selling opportunities all by themselves. Monday is the lone day that favors the upside,
which should not be surprising as the inside day itself would have occurred during the first week.

INSIDE DAY – WEEK TWO MONTHLY BREAKDOWN

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This is one of the most consistent seasonal situations you will find in all of trading for such a simple
little pattern. Negatives all the way down except for March. There are only three months that post
probabilities that favor the market moving higher, but two of them still post net average moves to
the downside. More than anything, this simply adds to the validity that the second week of the
month for inside days is bearish and is tradable.

INSIDE DAY - WEEK THREE DAY OF WEEK BREAKDOWN

Monday and Tuesday show some pretty solid numbers, obviously Monday for selling and Tuesday
for potentially buying. Wednesday shows a probability for the market to move down, but the net
average is not impressive. Thursday and Friday are hinting at a few hidden possibilities, but as far
as seasonal breakdown alone, nothing too major.

INSIDE DAY - WEEK THREE MONTHLY BREAKDOWN

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As you will recall, week three was pretty much dead even as far as the overall stats were concerned.
Looking at the days of the week and monthly breakdown begins to separate some of the
opportunities. The third week of May is the stand out, but only five occurrences limits the
importance. The reversal in March statistics should be noted. Week three is bearish.

INSIDE DAY – WEEK FOUR DAY OF WEEK BREAKDOWN

Stand out days in week four are Mondays for the sell side and Wednesdays for the buy side. Other
days there are either contradictions or the day is neutral, such as Friday. One note, Wednesday has
the fewest number of occurrences and a rather large loss average, which means there are still some
selling opportunities.

INSIDE DAY – WEEK FOUR MONTHLY BREAKDOWN

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Where week two saw the most consistency, week four has the biggest contrasts. There are five very
solid bearish months and six very solid bullish months. March numbers are not dramatic. The
contrasts are so dramatic that this monthly breakdown may be more important in determining how
to look at the fourth week than the monthly breakdown in other weeks.

INSIDE DAY – WEEK FIVE MONTHLY BREAKDOWN

Week five is actually not a full week, but is limited to trading on the 29th, 30th or 31st of a month.
Because of this, there are obviously fewer occurrences.

The dramatic numbers come on Monday (bullish) and Friday (bearish). With so few occurrences,
assigning any major influence to the seasonal scenario alone may not be advisable. But I included
them for your information.

INSIDE DAY SEASONAL SUMMARY:

There are several inside day seasonal scenarios that may provide solid trading opportunities without
any further requirements in market action. They are:

1. Sell first Thursdays of month

2. Buy the first Friday of the month
3. Sell during the second week of the month except Mondays and March
4. Buy third Monday of month except July (3rd week of July is most bearish week of year)
5. Sell third Tuesdays of month with caution in May and October.
6. Sell fourth Monday of month with caution on all bullish months.

From this point on, there is going to be a massive number of different scenarios that we are going to
look at with a massive number of statistics. I am not going to provide a tremendous amount of
commentary with these statistics as most will be obvious as far as what might be tradable and what
might not be tradable. However, there is another summary at the end listing the various trading
opportunities based on statistics provided. You may skip down to the summary without missing
much. All of the following statistics are provided for your own information and reference.

Also, keep in mind that certain patterns may provide duplicate trades that are also reflected in other
patterns. For example, if we are looking at a close that is lower than the previous close and nothing
else, there will be some duplicate trades from looking at a close that is lower than that day’s open.

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The first requirement we are going to add to the inside day requirement is that the close of the inside
day is less than the previous close. By doing so, we will essentially cut the number of occurrences
in half. This is how we will begin to isolate trading opportunities, by the most simple and obvious
divisions.

Close < close.1

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This simple requirement substantially increases the probability of selling the second week, and
dramatically increases the probability of selling on Mondays. These two factors alone provide
almost $100,000 in profits out of the potential $379,000 available from selling the market. That is
huge.

It is no surprise that the only months that have a greater probability of seeing the market move
higher when the inside day close is less than the previous close is March and October. Remember,
these stats include all weeks.

Close > close.1

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What was good for one side, was good for the other. Week one shows the greatest increase in
profitability by requiring the close to be greater than the previous close. No surprise that week two
is still bearish, but not by much. Clearly buying during the second week should be few and far
between.

Wednesday was the biggest beneficiary of requiring the close to be greater than the previous close.
The surprise in the monthly performance comes in March. May is the strongest all-around
performing month. This was also the case with the close of the inside day being lower than the
previous close.

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The next step is to look at where the market was going just prior to the inside day. I required that
the previous close was actually below the low of the bar before that. This means that the day before
the inside day was down pretty significantly. Is the inside bar simply a resting day for such an
occurrence? The statistics don’t lie.

Close.1 < low.2

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That theory is certainly not the case with regard to the first week of the month. Weeks three and
four looks like a coin toss with this situation. Wednesdays and Thursdays are clearly solid all
around which is no surprise when taking into consideration that Wednesday is a contrarian day in
many situations.

Once again, we will look at the opposite side of the coin and require that the day prior to the inside
day was moving higher, to the point where the close was actually greater than the previous high.

Close.1 > high.2

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The logic that the inside day was simply acting as a resting day prior to the market continuing
higher is proven to be completely false across the board. Out of all of these statistics, the
percentage probability AND the net average move favors the market moving down in all days, all
weeks and all months except for March and October.

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I am going to break pattern here and combine those two requirements before moving on.

Close < close.1 AND close.1 > high.2

Three of the four weeks are almost at 70% down with every day except Tuesday at 65% down or
more. As you will see, March and October are the only bullish months, and outside of August, the
rest are strongly bearish.

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Again, for the sake of pursuing this thought one more step, I am also going to combine the opposite
of the above and require that both the close is greater than the previous close AND the previous
close is less than the low before that:

Close > Close.1 and Close.1 < low.2

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These stats are not as impressive as its opposite pattern, but they are impressive nonetheless. Week
one shows the largest increase in performance while Mondays, Wednesdays and Thursdays are also
very solid, especially Thursday. Not all months are bullish, but there is not a single month that is
solid in the bearish camp. One oddball standout is one again, March.

Before the patterns get too complicated, we are going to simplify things again and bring it back
down to a single additional circumstance. This time, we are going to look at days where the close
of the inside day was higher than the open of the inside day, regardless of where the close was in
relationship to the previous day. There are going to be some duplicate trades and this is not going
to represent a brand new set of statistics.

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Close > Open

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Just looking at the close moving higher from the open does not seem to play a significant role in
determining where the market might move the following day. Regardless, we will once again look
at the opposite of this scenario and require the close to be lower than that same day’s open.

Close < Open

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Again, there is not a tremendous influence from looking at just the market moving down from the
open, but there is a little more consistency then from the opposite requirement. Week two
obviously falls in line while Mondays look to be quite bearish from this scenario. There is also
more consistency in the monthly performance levels and even a negative net average for the month
of October.

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INSIDE DAY AND GAPS:

Before we get into any more complicated situations and strategies, I am going to take a look at the
following open and require that the market gap higher than the inside day’s high or lower than the
inside day’s low.

Next bar open > high

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The weekly scene is almost dead even with the most bearish week being week four, not week two.
The first three days of the week tend to be a little more bearish when the market gaps higher, but
none that are too dramatic. The monthly outlook seems to have the overall characteristic play a
role. The bearish months are bearish with this pattern and the bullish months are bullish. If the
market gaps higher after an inside day, the monthly performance should probably at least be
considered.

Next bar open < low

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A gap lower doesn’t provide too many buying opportunities based on the week or day of week.
Week four shows a net average move higher of $602, but at a probability of less than 50%. Same
scenario with Friday, strong net average move higher with a probability of less than 50%. Week
three and Thursdays are the most bearish situation with this particular setup.

February is the most bullish while December is the most bearish??? The number of occurrences in
each month with this setup is the big red flag with this situation. There are 32 fewer occurrences of
the market gapping lower after an inside day than the market gapping higher.

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We have looked at a scenario where the market was either moving higher the day prior to the inside
day or lower prior to the inside day. The following statistics reflect a close previous to the inside
day that is within the range of the day prior to that. It is the “in between” pattern from what we
looked at earlier.

Close.1 < high.2 and close.1 > low.2

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There is nothing that sticks out with this scenario alone. There are enough occurrences though that
would support adding some additional requirement to see if a more clear picture emerges.

The following stats are based on requiring the previous close to the inside day be inside the range of
the day before that and for the close of the inside day to be less than the previous close.

Close.1 < high.2 and close.1 > low.2 AND close < Close.1

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We have solid bullish numbers for week one and solid bearish numbers for week two. Wednesdays
are clearly bearish and once again we have February the most bullish month and December the most
bearish. Perhaps there is a pattern being uncovered here. This was the case when the market
gapped lower than the inside day’s low.

Again, looking at the opposite side of the above scenario, we will simply require the close of the
inside day to be greater than the close of the previous day.

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Close.1 < high.2 and close.1 > low.2 AND close < Close.1

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There are a couple of things that stand out with these stats. The first is the fact that this is the most
bullish second week we have seen yet. It still has a net average move down, but barely. The other
thing is that Wednesday is opposite of the Wednesday in the opposite pattern. It was a sell in the
opposite pattern and it is a buy in this pattern. Friday also stands out.

One last major topic we are going to look at before we make some final conclusions and put
together some solid trading opportunities from these statistics. I am going to turn the focus to the
movement from the open to the close of the day before the inside day, and then add the inside day
into that scenario as well. It should be noted that this pattern includes inside days where the
previous close was greater than the high before that, and lower than the high before that. In other
words, it encompasses a combination of the previous close being inside the range of the day prior to
that as well as higher than the high of the prior day.

Close.1 > open.1 (regardless of where the close of the inside day is)

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This scenario paints a potentially bearish week one while also painting a very bearish Wednesday.
Overall this pattern is bearish, which falls in line with previous patterns that encompass some of the
same trades.

The following is combing the above pattern with another bearish pattern of having the close of the
inside day close lower than the previous day

Close.1 > Open.1 AND close < close.1

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33
With this combination, we have the most bearish second week stats thus far, and the most bearish
Wednesday stats thus far. We also have one of the most bullish March stats. Monday and
Thursday are also very solid in the bear camp.

Looking at the same relationship as far as the previous open and close, the following stats now
combine the close of the inside day being greater than the previous close as well.

Close.1 > open.1 and close > close.1

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Here is the only bullish second week pattern we have run across. Monday and Wednesday flipped
to the bullish side, which is not a surprise. March and December also made huge reversals.

Switching gears one last time, we are going to now look at the day before the inside day with the
close moving lower than the open.

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Close.1 < Open.1

As expected, the opposite does slide to the bullish camp as a general rule, although it doesn’t
overcome the strong down bias in the second week. None of the stats are dramatic, but some are
pretty solid.

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Adding the requirement of the inside day close being lower than the previous close has some pretty
bearish probabilities. Basically, the previous close was lower from the open and the current close is
lower from the previous close (market showing weakness).

Close.1 < Open.1 and Close < close.1

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We have some new stats coming out that have been more on the quiet side. Week three shows a
strong bearish tendency, but the number of occurrences is bordering on questionable. Monday is
very bearish, even without the $13,000 down day. There is consistency though with similar
situations which adds to the overall validity.

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Reversing the inside day’s close to being higher than the previous close also has some bullish
possibilities:

Close.1 < Open.1 and close > close.1

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As with several other situations, the bullish stats are solid, but none of them are dramatically
bullish. Weeks one and four stand out with this scenario. This is also one of the more consistent
bullish scenarios with regard to the monthly performance as well.

WEEK ONE BUYING PATTERNS:

1. Close > close.1

58% Up, Average Trade $686

2. Close.1 < Close.2

58% Up, Average Trade $800

3. Close > Close.1 AND Close.1 < Low.2

65% Up, Average Trade $1,077

4. Close.1 Inside Previous Range AND Close < Close.1

50%, Average Trade $889

5. Close.1 < Open.1

57% Up, Average Trade $786

6. Close.1 < Open.1 AND Close > Close.1

60% Up, Average Trade $877

WEEK TWO BUYING PATTERNS:

1. Close.1 > open.1 and close > close.1

69% Up, Average Trade $418

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WEEK THREE BUYING PATTERNS:

1. Close > Close.1 and Close.1 < Low.2

55% Up, Average Trade $587

WEEK FOUR BUYING PATTERNS:

1. Close > Close.1 and Close < low.2

61% Up, Average Trade $534

2. Close.1 < Open.1 and Close > Close.1

59% Up, Average Trade $558

WEEK ONE SELLING PATTERNS:

1. Close.1 > High.2

58% Down, Average Trade $518

2. Close < Close.1 AND Close.1 > high.2

68% Down, Average Trade $899

WEEK TWO SELLING PATTERNS:

1. If close < close.1 (not Mondays)

68% Down, Average Trade $1,219

2. Close.1 > high.2

63% Down, Average Trade $994

3. Close < Open

66% Down, Average Trade $1,055

4. Close.1 < high.2 and > low.2

56% Down, Average Trade $716

5. Close.1 > open.1

55% Down, Average Trade $963

6. Close.1 > open.1 AND close < close.1

64% Down, Average Trade $1,507

7. Close.1 < Open.1

55% Down, Average Trade $507

8. High < close.1

100% Down, $3,617

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WEEK THREE SELL PATTERNS:

1. Next bar open < low

56% Down, Average Trade $530

2. Close.1 < Open.1 and Close < Close.1

56% Down, Average Trade $1,151

WEEK FOUR SELLING PATTERNS:

1. Close.1 > high.2

67% Down, Average Trade $450

2. Close.1 > high.2 AND Close < Close.1

69% Down, Average Trade $617

The above statistics and potential buying and selling weeks can be further broken down based on
day of week and even month. Below is an example of taking one of the buying patterns for week
one and further enhancing the stats based on the day of week performance. The one caution is that
additional filters may be isolating too few of trades for there to be a valid statistical data set.
Caution should be used.

BULLISH INSIDE DAYS:

1. Week 1 Only – If the close > close.1 and the next day is not Thursday:

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2. Week 3 Only – If the close > close.1 and the next day is not Friday.

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3. Week 4 only. If close > close.1. Take trades only if next trading day is Wednesday,
Thursday or Friday. Also, do not take any trades during month of June or July.

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4. Week 5 Only. If close > close.1 and the next trading day is NOT Friday.

Combined Inside Day buy trades when close > close.1

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BULLISH INSIDE DAY WHEN CLOSE.1 < LOW.2

1. Week 1 only. If close.1 < low.2 and the next trading day is NOT Tuesday.

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2. Week 3 only. If close.1 < low.2 and next bar trading day is either Tuesday or
Wednesday:

3. Week 4 only. If close.1 < low.2 and next trading day is Tuesday or Thursday only.

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4. Week 5 only. If close.1 < low.2 and the next trading day is NOT Friday.

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COMBINED Trades for Close.1 < low.2

COMBINED close.1 < low.2 AND close > close.1 (except during week 2)

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FINAL NOTE

For a daily application of all of the above, be sure to refer to the S&P Probability Analysis daily
email and Signals.

www.DayTradingCalendar.com

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